How do I pay employees? And how do I get paid?
This course covers how to pay employees. We begin by asking: "What kind of a person do I need to attract, retain, and motivate for my business to succeed?" From here, we'll explain how to translate that pay strategy into the pay mix: the salary structure, short-term incentives, long-term incentives, and benefits that are aligned to your business objectives.
Interested in learning more about the technical aspects of compensation, but don't know where to begin? We'll give an overview of key the key technical skills: compliance with pay regulations, understanding stock options, shopping for health insurance and pension providers, and designing incentive plans. Lastly, we'll discuss non-monetary methods of motivating employees.
If you're interested in learning how to pay employees, or learning where your paycheck comes from, this course is for you!

Taught By

Alan Benson

Assistant Professor

Mike Davis

Senior Lecturer

Transcript

Welcome back. In this video, we're talking about broadbanding. So what is broadbanding? Broadbanding is the process of consolidating many grades into fewer bands with wider ranges. And so, this process is a process that can take away some of the structure and the frequency of promotions. But also gives us kind of a maximum amount of flexibility to because those ranges are very wide. So more advantages. So first of all, the advantages include more pay flexibility because those ranges can be still made very wide. More lateral job flexibility, because there's no need to worry about how grades snap on to each other if you switch from one job family to another job family. And also, they allow for a various specialization in terms of your career ladders because we have more of that lateral job flexibility career advancement. So what are some of the disadvantages? So one disadvantage is rare promotions because you're collapsing the grades. And also, some loss of structure because again those grades were essentially putting some bounds on the minimums and the maximums of the ranges. And so, what I want to talk about today in particular is a process of implementing broad band which are becoming increasingly popular in companies. In a way that gets all five, that is achieves pay flexibility, job flexibility, allows for a specialization within your career ladders, but also allows more frequent promotions and also a stronger structure. Now, let's return to our engineers. So here, again, at our organization, people enter the organization as a junior engineer and then maybe after three years if they do their job very well, they could get promoted to become an associate engineer. And then, after perhaps, another three years of doing their job well, they could become promoted to become a senior engineer. And we're going to try to, again, accomplish all those things that we want to accomplish. We want them to enter as a junior engineer still but we want to provide them more frequent small promotions that way we can use promotions as an incentive and use promotions at a motivating tool providers since that one is career advancing. And then, also, we want people to specialize into either technical or managerial tracks. That way some of our excellent star engineers can continue to excel in using their talents and perceived on their technical track. And others who perhaps are very good in terms of soft skills and managerial skills and people skills, might be able to instead choose a managerial track where they're actually leading projects as opposed to job duties that are more specific and germane into those technical engineers. And we're going to try to accomplish all of those. And so, just to revisit what our structure looks like, again people are entering into our organization as junior engineers. They might spend three years there. After another three years they may get promoted to become an associate engineer and lastly to a senior engineer. And then, now what do we want to do? So let's say we're revising this process and now instead of entering just as a junior engineer, we're going to break that down into a very narrow grade, and so first of all we come in as an A1 junior engineer. And then, instead of after waiting three years for a promotion, again, we want people to be promoted more frequently and so after one year you might be eligible to be promoted to an A2. Now, once again, you're still a junior engineer. They might be referred to as a Junior Engineer 2 instead of a Junior Engineer 1, for example. And then, after another year, you're eligible for another small promotion up into A3. And then, at this point, now that you've spent three years, you've achieved kind of what we wanted to achieve in terms of more frequent promotions. Now, we also want to give some people the flexibility to either specialize in terms of a technical track or managerial track. And so, now there's going to have to be a choice of whether they get promoted to from A3 to A4 or from A3 into B4 and B4 is going to represent a separate hierarchy, a separate career ladder for those who are interested in pursuing a managerial track. So let's say that you enter the organization as an A1 then you proceed to A2 and A3. And you decide that you would prefer to have your career advanced in technical direction. And so, then you might become promoted to A4. So now you're an Associate Engineer. And then, you're can be promoted to A5. Then, another year promote to A6, and then you'd be eligible for the next big promotion, from maybe Associate Engineer 3, which has the job code of A6 to a Senior Engineer 1, which has a job code of A7. So now you're up to A7 and then again you're eligible for promotions up to A8 and A9 and so on. So that could be one person, another person might say, I've spent my three years at a Junior Engineer and I enjoyed the technical side but I'd prefer to spend my time doing more of the people and the project management job duties. And so, instead of taking a promotion to A4 you accept a promotion into again a job that we'll call it B4 which is precisely along the managerial track. And so, you come in as B4, B5, B6 until you become eligible for a promotion, again to a big promotion to the senior job levels, B7, B8, B9. So now what we've done is we've again allowed for more frequent promotions and we've also allowed for some flexibility in terms of specialization. And what we're going to do, the intuition behind broadbanding is we're going to still preserve that flexibility in terms of pay by grouping in all of the levels four through six into associates. All the levels A7 through A9 and B7 through B9, into its own larger band. Let's see what this looks like in terms of our pay structure. So going to our pay structure, again, we have our Jr Engineers, As Engineers and Sr Engineers. The first thing we want to do is we want to break out those bigger grades into smaller ones that therefore allows for more frequent promotions. So you've broken out these rays into three different pieces each. So we have A1, A2, A3 for our Jr. Engineers. A4, A5, A6 for our Associate Engineers. A7, A8, A9 for our Senior Engineers. And we could do whatever we want to the ranges. Here, I just made them so the ranges stayed the same within those different grades. And then, this would be the clear ladder for someone who wants to stay within the technical side. We have A4, A5, A6, A7, A8, A9. So that's the technical ladder, so here's what the ladder would look for people who choose the managerial track. Inside you have the Project Leads, perhaps, as being kind of roughly equivalent in terms of stature and pay, as those associate engineers. And then, you would have the Sr. Project Leads being roughly the same in stature and pay as those senior engineers. And now once again what we're going to do is we're going to combine these into broader bands or broadbands. And so, we'll have all of our associate grades A4, A5, A6, B4, B5, B6 labeled as associates and then all of our senior grades, A7, A8, A9, B7, B8, B9 broad banded into our seniors. And so, these bands you might think of as being again or similar in terms of stature and pay as those within the same bands that will create some more flexibility in case someone decides they want to transfer from being an associate engineer to an associate project leader or vice versa. So you still have that flexibility as well and so this is an example of broadbanding where you've accomplished our goals. We've had more frequent promotions, we've had some flexibility. In terms of the job transitions and lateral transitions. You can change the ranges to make the pay more flexible, as well. And also we've allowed for multiple career ladders and we've also preserved that sense of structure that's so important to our sense of internal equity and fairness. So once again, those are the broadbands and thanks again for listening.

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